EXHIBIT 10.2
SUBSCRIPTION AGREEMENT
XXXXXXXXXX.XXX, INC.
THIS AGREEMENT made effective as of the ___ day of August, 2000 (the "Effective
Date")
BETWEEN:
XXXXXXXXXX.XXX, INC. (a Delaware corporation), of 00 Xxxxxxxx, Xxxxx X, Xxxx,
Xxxxxx 00000
(the "Company")
AND:
THE PARTY NAMED AS SUBSCRIBER BELOW
(the "Subscriber")
WHEREAS:
A. The Company is currently offering 1,000,000 units (the "Units") at
US$2.00 per Unit, each Unit consisting of one share of common stock with a
par value of $0.00001 (a "Common Share") and one non-transferable share
purchase warrant (a "Warrant"), to certain non "U.S. Persons" in an offer
and sale that satisfies certain requirements of Regulation S promulgated
under the Securities Act ("Regulation S"). Each Warrant will entitle the
Subscriber to subscribe for one additional Common Share at a price of
US$3.00 per share at any time up to 5:00 p.m. local time in Reno, Nevada on
the first anniversary of the Closing Date. The Units, the Common Shares,
and the Warrants are referred to in this Agreement as the "Securities";
B. The Company is offering the Securities pursuant to an exemption from
registration promulgated under Regulation S of the Securities Act of 1933,
as amended (the "Securities Act"); and
C. The Subscriber and any such beneficial purchaser is a non-resident of
the United States and is not a U.S. Person, as the terms "United States"
and "U.S. Person" are as defined in Regulation S made under the Securities
Act.
NOW THEREFORE THIS AGREEMENT WITNESSES that, in consideration of the mutual
covenants and agreements herein contained, the receipt of which is acknowledged,
the parties covenant and agree with each other as follows:
1. SUBSCRIPTION
1.1 Subscription. On the terms and subject to the conditions of this Agreement,
the Subscriber tenders this subscription and irrevocably subscribes for the
purchase of the number of Units set out below at the price of $2.00 per
Unit, pursuant to an exemption from registration under Regulation S. Each
Unit consists of one Common Share and one Warrant. Each Warrant is
exercisable to purchase one additional Common Share at a price of US$3.00
per share at any time up to 5:00 p.m. local time in Reno, Nevada on the
first anniversary of the Closing Date. By signing this Agreement, the
Subscriber acknowledges that the Company is relying on the accuracy and
completeness of the representations contained in this Agreement in
complying with its obligations under applicable securities laws.
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1.2 The Subscriber tenders to the Company the subscription funds set out below
(the "Subscription Funds") for the Units subscribed for in the form of a
wire transfer payable to "Xxxxxxxxxx.xxx, Inc."
2. REPRESENTATIONS, WARRANTIES, AND COVENANTS
2.1 The Subscriber makes the following representations and warranties to the
Company:
(a) The Subscriber is purchasing the Units, consisting of the Common
Shares and the Warrants, for its own account or for the account of one
or more persons for investment purposes only and not with a view to
resale or distribution and, in particular, it has no intention to
distribute either directly or indirectly any of the Common Shares
issued in connection with the purchase of the Units, or upon exercise
of the Warrants, in the United States or to U.S. persons; provided,
however, that the Purchaser may sell or otherwise dispose of any of
the Common Shares pursuant to registration thereof pursuant to the
Securities Act and any applicable state securities laws or under an
exemption from such registration requirements.
(b) The Subscriber recognizes that investment in the Securities involves
substantial risks and has taken full cognizance of and understands all
of the risks related to the purchase of the Securities, including
without limitation those set forth under the caption "Risk Factors" in
the Company's registration statement on Form S-1 (the "Form S-1")
filed with the United States Securities and Exchange Commission (the
"SEC") pursuant to the Securities Act, and the Company's reports on
Form 10-K and 10-Q pursuant to the Securities Exchange Act of 1934, as
amended.
(c) In making the Subscriber's decision to invest in the Units, the
Subscriber has carefully reviewed and is familiar with the Company's
Form S-1, as amended, and the related disclosure filed by the Company
with the SEC, and the Subscriber has relied on the information
contained therein and the documents and materials delivered therewith,
and on the Subscriber's own independent investigations and/or those of
the Subscriber's own professional tax and other advisors. The
Subscriber and the Subscriber's advisors (including the Subscriber's
representative, if any) have been given the opportunity to obtain
information and to examine all documents relating to the Company, and
to ask questions of and to receive answers from the officers of the
Company concerning the Company, the officers and directors, and the
terms and conditions of this investment, and to obtain any additional
information, to the extent the Company possesses that information or
could acquire it without unreasonable effort or expense, to verify the
accuracy of any information previously furnished. All questions have
been answered to the full satisfaction of the Subscriber, and all
information and documents, records and books pertaining to this
investment that the Subscriber has requested have been made available
to the Subscriber.
(d) The Subscriber believes that it, either alone or with the assistance
of its advisor(s) (including the Subscriber's representative, if any),
has such knowledge and experience in financial and business matters
that the Subscriber is capable of reading and interpreting disclosure
materials, such as the Form S-1 and the Company's financial
statements, and of evaluating the merits and risks of the prospective
investment in the Securities. The Subscriber has obtained sufficient
information to evaluate the merits and risks of an investment in the
Company and has the net worth to undertake those risks.
(e) The Subscriber has obtained, to the extent the Subscriber deems
necessary, the Subscriber's own personal, professional advice with
respect to the risks inherent in the investment in the Company and the
suitability of the investment in the Securities in light of the
Subscriber's financial condition and investment needs.
(f) The Subscriber believes that investment in the Securities is suitable
for the Subscriber based on the Subscriber's investment objectives and
financial needs, and the Subscriber has adequate means for providing
for the Subscriber's current financial needs and personal
contingencies and has no need for liquidity of investment with respect
to the Securities.
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(g) The Subscriber is able to (i) hold the Common Shares and, if
exercised, the Common Shares underlying the Warrants for an indefinite
period of time, (ii) bear the economic risk of the Subscriber's
investment, and (iii) withstand a complete loss of the investment.
(h) The Subscriber has not purchased the Securities as a result of any
form of general solicitation or general advertising, including
advertisements, articles, notices, or other communications published
in any newspaper, magazine, or similar media, or broadcast over radio
or television, or any seminar or meeting whose attendees have been
invited by general solicitation or general advertising.
(i) The Subscriber, and if applicable, each person for whose account it is
purchasing the Units:
(i) is not a "U.S. Person," as that term is defined by Rule 902 of
Regulation S (the definition of which includes, but is not
limited to, an individual resident in the United States and an
estate or trust of which any executor or administrator or
trustee, respectively, is a U.S. Person and any partnership or
corporation organized or incorporated under the laws of the
United States);
(ii) was not in the United States when its buy order was made to the
Company, and the Subscriber did not execute or deliver this
Agreement in the United States;
(iii)acknowledges that no offers to sell the Units were made by any
person to the Subscriber while the Subscriber was in the United
States;
(iv) acknowledges that the Units are not being acquired, directly or
indirectly, for the account or benefit of a U.S. Person or a
person in the United States;
(v) acknowledges that the Units, consisting of the Common Shares and
the Warrants, have not been registered under the Securities Act,
and the Subscriber undertakes and agrees that it will not offer
or sell the Common Shares unless such Common Shares are sold in
accordance with Regulation S under the Securities Act, the Common
Shares are registered under the Securities Act and the securities
laws of all applicable states of the United States, or such
Common Shares are sold pursuant to an available exemption from
such registration requirements. The Subscriber understands that
the Company has no obligation or present intention of filing a
registration statement under the Securities Act in respect of the
Common Shares.
(j) The Subscriber understands that the Common Shares issuable upon
purchase of the Units and the Common Shares issuable on the exercise
of the Warrants may not be offered, sold, transferred, pledged, or
hypothecated to any person in the absence of registration under the
Securities Act or an opinion of counsel satisfactory to the Company
that registration is not required. The Subscriber understands that the
Company does not plan, and is under no obligation to provide for,
registration of the Common Shares in the future. Accordingly, any
subsequent sale of part or all of the Subscriber's interest in the
Common Shares will be permissible only if an exemption from the
applicable registration provisions of federal and state law is
available at the time of the proposed disposition. Even if an
exemption is available, the assignability and transfer of the
Securities is subject to limitations imposed by this Agreement.
(k) The Subscriber further understands that a legend in substantially the
following form will be placed on all documents evidencing the Common
Shares and the Warrants and that similar notations may be made on the
Company records as a means of preventing the disposition of the Common
Shares other than in accordance with this Agreement and applicable
law:
"THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN AND WILL NOT BE
REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED
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(THE "1933 ACT"). THESE SECURITIES MAY BE OFFERED, SOLD, PLEDGED OR
OTHERWISE TRANSFERRED ONLY (A) TO THE COMPANY, (B) OUTSIDE THE UNITED
STATES IN COMPLIANCE WITH RULE 904 OF REGULATION S UNDER THE 1933 ACT,
(C) IN COMPLIANCE WITH THE EXEMPTION FROM THE REGISTRATION
REQUIREMENTS UNDER THE 1933 ACT PROVIDED BY RULE 144 OR RULE 144A
THEREUNDER, IF AVAILABLE, AND IN ACCORDANCE WITH APPLICABLE STATE
SECURITIES LAWS, OR (D) IN A TRANSACTION THAT DOES NOT REQUIRE
REGISTRATION UNDER THE 1933 ACT OR ANY APPLICABLE STATE LAWS AND
REGULATIONS GOVERNING THE OFFER AND SALE OF SECURITIES, AND THE HOLDER
HAS, PRIOR TO SUCH SALE, FURNISHED TO THE COMPANY AN OPINION OF
COUNSEL, OF RECOGNIZED STANDING, OR OTHER EVIDENCE OF EXEMPTION,
REASONABLY SATISFACTORY TO THE COMPANY. HEDGING TRANSACTIONS INVOLVING
THE SECURITIES REPRESENTED HEREBY MAY NOT BE CONDUCTED UNLESS IN
COMPLIANCE WITH THE 1933 ACT."
(l) The Subscriber understands and agrees that the Warrants may not be
exercised unless registered under the Securities Act and any
applicable state securities laws or unless an exemption from those
registration requirements is available, and that certificates
representing the Warrants will bear a legend to that effect.
(m) If a partnership, trust, corporation, or other entity: (i) the
Subscriber has the power and authority to sign and comply with the
terms of this Agreement and the person signing this Agreement on its
behalf has the necessary power to do so; (ii) the Subscriber's
principal place of business and principal office are located within
the jurisdiction set forth in its address below.
(n) The Subscriber understands and agrees that there may be material tax
consequences to the Subscriber of an acquisition or disposition of the
Securities. The Company gives no opinion and makes no representation
with respect to the tax consequences to the Subscriber under United
States, state, local or foreign tax law of the Subscriber's
acquisition or disposition of the Securities.
(o) The Subscriber confirms that neither the officers of the Company nor
any of its affiliates or agents have made any representations or
warranties or statements, except as explicitly set forth in this
Agreement, concerning the Subscriber's investment in the Units,
including but not limited to any representations or warranties
concerning tax consequences that may arise in connection with the
Subscriber's investment in the Securities or the anticipated financial
results of the operations of the Company.
2.2 The Subscriber agrees as follows:
(a) If the Subscriber decides to offer, sell or otherwise transfer any of
the Common Shares or Warrants, it will not offer, sell or otherwise
transfer any of such securities directly or indirectly, unless:
(i) the sale is to the Company;
(ii) the sale is made outside the United States in a transaction
meeting the requirements of Rule 904 of Regulation S under the
Securities Act and in compliance with applicable local laws and
regulations;
(iii)the sale is made in compliance with the exemption from the
registration requirements under the Securities Act provided by
Rule 144 or Rule 144A thereunder, if available, and in accordance
with any applicable state securities or "Blue Sky" laws; or
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(iv) the securities are sold in a transaction that does not require
registration under the Securities Act or any applicable U.S.
state laws and regulations governing the offer and sale of
securities; and
with respect to subparagraphs (iii) and (iv) hereof, it has prior to
such sale furnished to the Company an opinion of counsel reasonably
satisfactory to the Company.
(b) The Subscriber agrees not to engage in any hedging transactions or other
transactions that have the effect of transferring the economic risk of
ownership of the Common Shares unless such transactions comply with the
requirements of the Securities Act.
(c) the Subscriber acknowledges that any person who exercises a Warrant will be
required to provide to the Company either:
(i) written certification that it is not a U.S. Person and that such
Warrant is not being exercised within the United States or on behalf
of, or for the account or benefit of, a U.S. Person; or
(ii) a written opinion of counsel or other evidence satisfactory to the
Company to the effect that the Warrants and the Warrant Shares have
been registered under the Securities Act and applicable state
securities laws or are exempt from registration thereunder.
3. CLOSING
3.1 The Company will deliver a treasury order (the "Treasury Order") to its
transfer agent sufficient to cause the transfer agent to issue to the
Subscriber a share certificate or certificates representing the Common
Shares, and the Company will issue a warrant certificate or certificates
representing the Warrants comprising the Units as provided for below by the
Subscriber.
4. GENERAL
4.1 For the purposes of this Agreement, time is of the essence.
The parties will sign and deliver all further documents and instruments and do
all things that may, either before or after the signing of this Agreement, be
reasonably required to carry out the full intent and meaning of this Agreement.
4.2 This Agreement may not be assigned by either party hereto.
4.3 This Agreement may be signed by the parties in as many counterparts as may
be deemed necessary, each of which so signed will be deemed to be an
original, and all counterparts together will constitute one and the same
instrument. A copy of this Agreement transmitted by facsimile will be
treated and relied on for all purposes by any person as an originally
signed copy.
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IN WITNESS WHEREOF the parties have signed this Agreement as of the Effective
Date.
XXXXXXXXXX.XXX, INC.
Per:
-------------------------------------
Authorized Signatory
TO BE COMPLETED BY THE SUBSCRIBER
A. Registration Instructions The name and address of the person in whose name
the Securities are to be registered is as follows (if the name and address
is the same as was inserted in paragraph A above, then insert "N/A"):
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Name (please print or type)
-------------------------------------------------
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Address
Attn:
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B. Delivery Instructions. The name and address of the person to whom the
certificates representing the Subscriber's Securities referred to in
paragraph A above are to be delivered is as follows (if the name and
address is the same as was inserted in paragraph A above, then insert
"N/A"):
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Name (please print or type)
-------------------------------------------------
-------------------------------------------------
Address
Attn:
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C. Subscription Amount:
Subscription Funds: US$ ----------------------
Number of Units: ---------Units (where each Unit consists of one share
and one share purchase warrant. Each warrant will
entitle the Subscriber to subscribe for one additional
common share of the Company on the terms set forth in
paragraph 1.1 of this Subscription Agreement).
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TO BE COMPLETED AND SIGNED BY THE SUBSCRIBER:
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Name of the Subscriber - use the name inserted in paragraph A above.
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Signature of Subscriber
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Title (if applicable)
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